Hydraulic Fracturing 101

1. Hydraulic Fracturing 101 Presented by Jerry Strahan, P.E. Chief, Branch of Fluid Minerals Bureau of Land Management Colorado State Office

2. Introduction to Hydraulic Fracturing • Shale Oil and Gas Development • Horizontal Drilling • Fracking Process • Environmental Concerns • Media and Fracking Information • Questions

3. A game changer • World’s major gas reserves: • Qatar 1200 TCF • Russia 400 TCF • US Marcellus 300 TCF • US Haynesville 250 TCF • US Eagle Ford (emerging) • US Niobrara (emerging) • Bakken Shale (N.D.) • Largest US oil discovery since Alaska at 3.6B bbls • US is global leader in shale technology & development and in proven gas reserves!

6. What is Horizontal Drilling? • Hydraulic fracturing is generally associated with horizontal drilling practices. • It is defined as deviating the wellbore at least 80 degrees from vertical so that the borehole penetrates a productive formation in a manner parallel to the formation. Or simply “drilling sideways”. Source: ProPublica http://geology.com http://www.oilandgasiq.com/glossary/horizontal-drilling/

7. What is Hydraulic Fracturing? • Well stimulation technique that has been employed by the oil and gas industry since 1947. The technique is used to create spaces in the rock pores deep underground to release the oil and natural gas so that it can flow to the surface. • Fracturing fluids are injected at high pressure into the targeted formation, creating fissures that allow oil and gas to move freely from rock pores where it was trapped. Source: ProPublica

8. Typical Sanjel Hydraulic Fracture job set-up.

9. Simplified Steps In Hydraulic Fracturing 1. Water, sand and additives are pumped at extremely high pressures down the wellbore. 2. The liquid goes through perforated sections of the wellbore and into the surrounding formation, fracturing the rock and injecting sand or proppants into the cracks to hold them open. 3. Experts continually monitor and gauge pressures, fluids and proppants, studying how the sand reacts when it hits the bottom of the wellbore, slowly increasing the density of sand to water as the frac progresses. http://hydraulicfracturing.aitrk.com/Process/Pages/information.aspx

10. Simplified Steps In Hydraulic Fracturing (Cont’d.) 4. This process may be repeated multiple times, in “stages” to reach maximum areas of the wellbore. When this is done, the wellbore is temporarily plugged between each stage to maintain the highest water pressure possible and get maximum fracturing results in the rock. 5. The frac plugs are drilled or removed from the wellbore and the well is tested for results. 6. The water pressure is reduced and fluids are returned up the wellbore for disposal or treatment and re-use, leaving the sand in place to prop open the cracks and allow the oil/gas to flow. http://hydraulicfracturing.aitrk.com/Process/Pages/information.aspx

11. Why Hydraulic Fracturing and Horizontal Drilling? • Combined with horizontal drilling in shale formations, hydraulic fracturing has unlocked vast new supplies of oil and natural gas. • The technology has also made production feasible in many areas that were previously considered too deep, too hard, and too expensive to access. • The “fracture paths” created by hydraulic fracturing, and the increased surface area exposed by horizontal drilling, can increase production rates up to many hundreds of percent. • Hydraulic fracturing and horizontal drilling provide an environmental advantage in that they reduce the amount of wells needed to effectively drain an underground oil/gas reservoir. Less wells mean less roads, less pipeline, less surface disturbance, etc. http://geology.com

12. Horizontal Drilling Animation http://www.youtube.com/watch?v=fBQCQ6HL2Yw

13. Hydraulic Fracturing Animation http://www.youtube.com/watch?v=qjP-K1VaI1k

14. Illustration from EPA’s ‘Potential Relationships Between Hydraulic Fracturing and Drinking Water Resources’ presentation.

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18. Figure 5

19. Environmental Concerns • Protection of groundwater and surface water from contamination. • Chemicals and additives in the fracturing fluid. • Large volumes of water needed for hydraulic fracturing. • Disposal of spent fracturing fluid (or flow-back fluid).

20. Groundwater Protection • Well integrity: Design and construction of the well to ensure isolation in wellbore. • Surface casing set below useable groundwater and cemented to surface. • Intermediate and Production casing is cemented to isolate hydrocarbon zones, providing further protection to groundwater. • Multiple layers of protective steel casing surrounded by cement. • Cement Bond Logs verify quality of cement job and centralizers placed on the casing assures uniform cementing.

22. ~200’ 1000’ Microseismic Evaluation of Fracking Evaluating Stratigraphic Confinement Cross sectional view

23. Groundwater Protection

24. http://hydraulicfracturing.aitrk.com/Process/Pages/information.aspxhttp://hydraulicfracturing.aitrk.com/Process/Pages/information.aspx

25. Subsurface Risks are managed by WELL CONSTRUCTION STANDARDS CONDUCTOR PIPE FRESH WATER AQUIFER ZONE SURFACE CASING PRODUCTION CASING SHALLOW PRODUCING ZONE INTERMEDIATE PRODUCING ZONE TARGET PRODUCING ZONE

26. GOOD MECHANICAL INTEGRITY: No leaks in or behind the casing strings CONDUCTOR PIPE FRESH WATER AQUIFER ZONE SURFACE CASING PRODUCTION CASING SHALLOW PRODUCING ZONE INTERMEDIATE PRODUCING ZONE TARGET PRODUCING ZONE

27. CEMENT CHANNELING behind production casing CONDUCTOR PIPE PRESSURE BUILDS UP FRESH WATER AQUIFER ZONE SURFACE CASING PRODUCTION CASING FORMATION SHALLOW PRODUCING ZONE CASING CEMENT INTERMEDIATE PRODUCING ZONE TARGET PRODUCING ZONE

28. INSUFFICIENT CEMENT COVERAGE CONDUCTOR PIPE PRESSURE BUILDS UP FRESH WATER AQUIFER ZONE SURFACE CASING PRODUCTION CASING SHALLOW PRODUCING ZONE INTERMEDIATE PRODUCING ZONE TARGET PRODUCING ZONE

29. LEAK THROUGH CASING CONDUCTOR PIPE FRESH WATER AQUIFER ZONE SURFACE CASING PRODUCTION CASING FORMATION CASING SHALLOW PRODUCING ZONE INTERMEDIATE PRODUCING ZONE TARGET PRODUCING ZONE

30. CEMENT CHANNELING behind surface casing CONDUCTOR PIPE FRESH WATER AQUIFER ZONE SURFACE CASING COAL SEAM (methagenic) FORMATION PRODUCTION CASING CASING CEMENT SHALLOW PRODUCING ZONE INTERMEDIATE PRODUCING ZONE TARGET PRODUCING ZONE

31. GOOD MECHANICAL INTEGRITY: No leaks in or behind the casing strings CONDUCTOR PIPE FRESH WATER AQUIFER ZONE SURFACE CASING PRODUCTION CASING SHALLOW PRODUCING ZONE INTERMEDIATE PRODUCING ZONE TARGET PRODUCING ZONE

32. Environmental Concerns • Protection of groundwater and surface water from contamination. • Chemicals and additives in the fracturing fluid. • Large volumes of water needed for hydraulic fracturing. • Disposal of spent fracturing fluid (or flow-back fluid).

33. Chemicals and Additives http://hydraulicfracturing.aitrk.com/Fracturing-Ingredients/Pages/information.aspx

34. Hydraulic Fracturing Separating the Facts from the Hype Water ViscosifiersGuar Gum, Cornstarch, Agar Oilfield Use Thicken water for proppant (sand) transport Home Use Ice Cream Gluten Free Baking Carpet Backing Petri Dishes Guar Bean Cluster Agar – Sea Vegetable Flakes

35. Hydraulic Fracturing Separating the Facts from the Hype Crosslinkers Borax, a naturally occurring mineral Oilfield Use Thicken water for proppant (sand) transport Home Use Laundry Detergent Fire Retardants Cosmetics Pesticides Slime

36. Hydraulic Fracturing Separating the Facts from the Hype Surfactants Oilfield Use Prevent oil and water from forming an emulsion Cause oil and water to form an emulsion Foamers Degreasers and Cleaners Home Use Bathing/Shampooing Salad Dressings Dust Control Gardening Cleaning

37. Hydraulic Fracturing Separating the Facts from the Hype DisinfectantsBleach, Biocides Oilfield Use Control naturally occurring bacteria or algae Home Use Drinking Water Treatment Household Cleaners Swimming Pools

38. Hydraulic Fracturing Separating the Facts from the Hype BuffersSodium Bicarbonate, Sulfamic Acid, Acetic Acid, Citric Acid, Ascorbic Acid, Sodium Hydroxide Oilfield Use Adjusts the pH of the frack fluid which affects the viscosity of the fluid Home Use Baking Soda Remove Grout Haze Vinegar Oranges Vitamin C Drano

39. Hydraulic Fracturing Separating the Facts from the Hype BreakersHydrogen Peroxide, Ammonium Persulfate, Enzymes Oilfield Use Causes gel to break down after sand is in place allowing fluid to flow back to surface Home Use Septic Tank Maintenance Manufacture of Circuit Boards Hair Bleaching Disinfectant

40. Hydraulic Fracturing Separating the Facts from the Hype Iron ControlCitric Acid, Ascorbic Acid, Acetic Acid Oilfield Use Prevent rust which can lead to plugging of the formation Home Use Lemons Vitamin C Vinegar

41. Chemicals and Additives • Wellbore integrity isolates fracture fluids. • Fluid “flow-back” adequately stored in lined earthen pits or steel tanks until proper disposal. • Material handling on surface is in accordance with requirements and long-standing industry practices. • MSDS sheets available for review on well site.

42. Environmental Concerns • Protection of groundwater and surface water from contamination. • Chemicals and additives in the fracturing fluid. • Large volumes of water needed for hydraulic fracturing. • Disposal of spent fracturing fluid (or flow-back fluid).

43. Water Volumes • Typically,10,000-15,000 barrels per well (420,000-630,000 gallons) are needed for fracture stimulation. 30-40% will flow back to surface. • Use is temporary, not a long term commitment. • The amount of water that is used can be reduced when fracture fluids are recycled. • Other water use should be considered with respect to current water uses (i.e. agricultural, municipal, power generation, etc.).

44. Environmental Concerns • Protection of groundwater and surface water from contamination. • Chemicals and additives in the fracturing fluid. • Large volumes of water needed for hydraulic fracturing. • Disposal of spent fracturing fluid (or flow-back fluid).

45. Fluid Disposal • Underground injection. • Commercial disposal facilities. • Surface disposal pits. • Treatment/Reuse

46. Getting to the Bottom of FRACKING “The truth is rarely pure and never simple” — Oscar Wilde

47. THE WALL STREET JOURNAL December 9, 2011 EPA Ties Fracking, Pollution. “Chemicals found in a Wyoming town's drinking water likely are associated with hydraulic fracturing, the Environmental Protection Agency said Thursday, raising the stakes in a debate over a drilling technique that has created a boom in natural-gas production.”

48. THE WALL STREET JOURNAL December 20, 2011 The EPA’s Fracking Scare “…the U.S. Geological Survey has detected organic chemicals in the well water in Pavillion (population 175) for at least 50 years—long before fracking was employed. There are other problems with the study that either the EPA failed to disclose or the press has given little attention to.”

49. THE WALL STREET JOURNAL April 1, 2012 EPA Backpedals on Fracking Contamination “The Environmental Protection Agency has dropped its claim that an energy company contaminated drinking water in Texas, the third time in recent months that the agency has backtracked on high-profile local allegations linking natural-gas drilling and water pollution.” “In addition to dropping the case in Texas, the EPA has agreed to substantial retesting of water in Wyoming after its methods were questioned.”

50. THE DENVER POST December 9, 2011 Hydraulic Fracking Linked for First Time to Groundwater Pollution “Hydraulic fracturing, a controversial oil-and-gas production technique used in Colorado and across the country, has been linked for the first time to groundwater pollution in a case near Pavillion, Wyoming.”